Question

Carl Cornfield makes a payment of $250 on a panel truck. What two lines of the balance sheet will this payment change?

Answer 1

The answer to the first blank is cash.

The answer to the second blank would be accounts payable.

Answer 2

This transaction will reduce both the cash and accounts payable sheets.

In accounting, an account payable is any contribution from a debit party, which appears as a result of a purchase of goods or services in terms of credit, to a creditor party. The reduction of this sheet is due to the fact that with the payment, there are less accounts payable.

Also, cash money is the name of money in the form of coins or paper money (bills) used to make cash payments. The reduction of this sheet is due to the fact that with the payment the available cash is reduced.